CEO Advisor Newsletter January 2020
Growth Through Acquisition vs. Organic Business Growth
Every CEO/business owner and business is unique so you want to determine if an acquisition is the right growth strategy for your company. Or are you better off growing in more organic ways by expanding geographically, or developing new products or focusing on aggressive sales and marketing?
Let's look into the pros and cons of growth through acquisition versus organic business growth so you're in a better position to make that decision. CEO Advisor, Inc. focuses on growing businesses to the next level, and are experts in assisting CEOs with both organic growth and growth by acquisitions.
The Pros of Organic Growth
Growing your business organically offers the most control over how that growth occurs, but certainly takes longer. By staying focused on continually improving your sales and marketing, improving your products or services, and identifying new or more profitable markets, you're going to find that growth is more predictable and controllable over the long term.
The Cons of Organic Growth
The biggest potential negative aspect of relying on strictly organic growth is that it's a slow process. It may take years for the market to evolve and for your business to be able to afford expansion into a new geographic area. Developing new products and building substantial sales for these products can take many years. Growth is paramount to profits and building value in your business so compressing time can be critical.
The Pros of Growth From Strategic Acquisitions
Unlike steady organic growth, growth through an acquisition or merger is generally much faster and can yield a number of other instant benefits, if done right, that can help make that rapid growth sustainable.
Growth through acquisitions is a faster, less risky method of growing your business and achieving economies of scale. The competitive advantages include acquiring and eliminating competition, immediate market penetration, gaining key people and expertise, securing new products and technology, gaining access to international markets, as well as, gaining valued management team members, customers and added sales.
The Cons of Growth Through Acquisitions
Growth through acquisitions is rapid and can yield fast results, but you will need the expertise and experience to execute on this strategy properly. CEO Advisor, Inc. are experts in the entire acquisition process. The planning and execution required in the time immediately following an acquisition or merger can present a number of management challenges that could hinder that rapid growth or plant the seeds of future failure.
Each merger or acquisition requires organizing the workforce and/or management team so the post-acquisition integration process is very important and CEO Advisor, Inc. can assist you through the process.
The question of whether to make an acquisition or expand organically must be answered individually by each CEO or business owner based on their own unique circumstances, but a business advisor/M&A will be extremely helpful in advising you every step of the way.
Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. for a no cost initial consultation at (949) 629-2520, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.
Securing Valued Advisors for an Optimal Exit
A strong advisor will generate a tremendous return on your investment. CEO Advisor, Inc. has worked with clients generating a 100X return by increasing our client's investment in sales, profits and increased business value.
Engaging The Right Advisors. CEO Advisor, Inc. is a business advisory, growth capital and mergers and acquisitions advisory firm that works exclusively with CEOs, presidents and business owners. Our focus and expertise is a critical aspect of growing our clients' sales, profits and value of their businesses for an optimal exit. Your corporate attorney, CPA or tax advisor, as well as, your insurance and banking advisors are also extremely important to your success. Your business/M&A advisor such as Mark Hartsell, MBA, President of CEO Advisor, Inc. will be the one to guide your through the entire preparation and sale process and will coordinate all of your other advisors to ensure maximum results.
Clear Goals. Your engagement with a business/M&A advisor should include a set of clearly defined, written goals, time-frame for achieving the initial goals, hours to be committed monthly by the advisor for a monthly retainer, along with regularly scheduled meetings and conference calls in a clearly stated engagement agreement, with an incentive bonus for achieving a successful exit.
Run on all Cylinders. No matter how ambitious or talented a CEO, president or business owner may be, it is extremely hard to cover all aspects of business in today's complex environment, especially the complexity and amount of work of selling your company. This is why all CEOs and business owners need sound, seasoned, trusted advice and help with executing their plan to maximize sales, profits and value for the sale of the company. Otherwise, your business may be running on only half of its cylinders at half speed.
Time is Precious. Many CEOs, presidents and business owners create a Board of Advisors and then have no idea what to do with them or do not follow-up on gaining value from them. Similarly, retired industry veterans agree to advise businesses without any clear sense of responsibility, continuity or hands-on advice with substantial work performed. Group coaching can be a major waste of time and money as 90% of the time is spent on someone else's problems from other industries.
Hands-on Work and Expertise. An Advisor should be much more than a mentor or coach. A trusted business/M&A advisor is a special relationship between a CEO or business owner and a third party expert with a specific value or expertise working on a written set of goals and deliverables on a weekly basis.
Your advisors must roll up their sleeves and invest the needed time to serve the business properly, and the business must invest time and money into the relationship in order to ultimately achieve these goals. Otherwise, your goals may be out of reach for many months or years costing the business tremendously in lost sales, lost opportunities, lost profits and diminished value or the inability to sell the company at all.
CEO Advisor, Inc. works with well defined, written goals conducting weekly meetings with agendas based on these goals and needs of the CEO, while performing a tremendous amount of work that is instrumental in achieving the CEO's goals.
Communicate. Ask for the help you need and then maintain open communications with your advisors and expect your advisors to be direct and to the point with you. This is important for several reasons and will serve you well as you build your business. The reason you signed up an advisor is because they are successful, connected, and knowledgeable people. If you want their help, simply ask for it.
Pay for Expertise. If you're going to gain the expertise you need, you should be willing to pay. Actually, you should be happy to pay. The right advisor can positively affect your business, your profits and your life tremendously. If you can generate a 25X, 50X or 100X return on your investment, you should be prepared and excited to pay a reasonable fee to gain the help you need.
Initiating the Sale Process. When you have discussed a plan to sell the company with your business/M&A advisor, and other advisors and you are committed to initiating the sale, your business/M&A advisor will perform the needed preparation work (1 - 3 months), including creating a target list of potential acquirers; contact the potential acquirers (1+ months); solicit and negotiate offers (1 month); perform the required Due Diligence (1 - 1.5 months) and assist with the business issues in the legal documents (1 month) through to the closing of the transaction.
Reap the Benefits. With a trusted business advisor/M&A advisor, you should see a clear and methodical path to substantial rewards within three months. All information should be documented and the plan and goals should be pursued consistently toward success and completion. The right team of advisors will increase sales and profits, protect your assets, build your business, increase your value substantially and enable you to tremendously enhance your ability to sell your company for an optimal value for an ultimate sale and the largest payday of your life.
We address your specific needs with hands-on action, expertise and seasoned advice. Call Mark Hartsell, MBA, President of CEO Advisor, Inc. today at (949) 629-2520, text Mark at (714) 697-3370 or email MHartsell@CEOAdvisor.com to schedule a free initial consultation.